CHEMBOND CHEMICALS LIMITED , MUMBAI V. ASSISTANT COMMISSIONER OF INCOME TAX 6(2)(1), MUMBAI

ITA 5085/MUM/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1291 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 28-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A M MITTAL
• Assessee Lawyers: DHIREN P TALATY
• Keywords: Additional evidence; Set aside
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH C, MUMBAI BEFORE SHRI A.D. JAIN, VICE PRESIDENT AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.5085/M/2017 ASSESSMENT YEAR: 2012-13 M/S. CHEMBOND CHEMICALS LTD., B-23, TODI INDUSTRIAL ESTATE, 2 ND FLOOR, NEW SUN MILL COMPOUND, LOWER PAREL, MUMBAI 400 013 PAN: AAACC5467A VS. ASSISTANT COMMISSIONER OF INCOME TAX 6(2)(1), ROOM NO.504, 5 TH FLOOR, AAYAKAR BHAVAN, MUMBAI - 400020 (APPELLANT) (RE SPONDENT) PRESENT FOR: ASSESSEE BY : SHRI DHIREN P. TALATY, A.R. REVENUE BY : SHRI A.M. MITTAL, D.R. DATE OF HEARING : 25.09.2019 DATE OF PRONOUNCEMENT : 17.12.2019 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSES SEE AGAINST THE ORDER DATED 17.04.2015 OF THE COMMISSIO NER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS TH E CIT(A)] RELEVANT TO ASSESSMENT YEAR 2012-13. 2. THE ASSESSEE HAS RAISED THREE GROUNDS. ALL THE THREE GROUNDS ARE AGAINST THE ORDER OF LD. CIT(A) CONFIRM ING THE AOS ACTION IN DISALLOWING THE WEIGHTED DEDUCTION OF RS. 45,55,004/- UNDER SECTION 35(2AB) OF THE ACT. ITA NO.5085/M/2017 M/S. CHEMBOND CHEMICALS LTD. 2 3. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IS ENGA GED IN THE BUSINESS OF MANUFACTURE OF METAL TREATMENT AND OTHE R SPECIALTY CHEMICALS AND DURING THE YEAR CLAIMED DEDUCTION OF RS.91,10,008/- UNDER SECTION 35(2AB)(1) OF THE ACT ON ACCOUNT OF EXPENSES INCURRED ON R&D ACTIVITIES IN AREAS OF BIOTECHNOLOGY, METAL CONSTRUCTION CHEMICALS, PURIFI CATION & COATINGS ETC. DURING THE COURSE OF ASSESSMENT PROC EEDINGS, THE ASSESSEE WAS CALLED UPON VIDE ORDER SHEET ENTRY DAT ED 03.03.2015 TO SUBMIT THE STATUTORY APPROVAL GRANTED BY THE COMPETENT AUTHORITIES IN ORDER TO JUSTIFY THE CLAIM UNDER SECTION 35(2AB) OF THE ACT. HOWEVER, THE ASSESSEE COULD NO T PRODUCE THE REQUISITE DETAILS SUCH AS FORM 3CK, 3CL AND 3CM AND IN ABSENCE OF THE REQUISITE APPROVAL TO CARRY OUT RESE ARCH AND DEVELOPMENT ACTIVITY, THE CLAIM OF THE ASSESSEE WA S REJECTED BY THE AO TO THE EXTENT OF WEIGHTED AMOUNT BY ALLOWING THE ACTUAL EXPENDITURE AND CONSEQUENTLY RS.45,55,004/- WAS AD DED TO THE INCOME OF THE ASSESSEE IN THE ASSESSMENT ORDER FRAM ED UNDER SECTION 143(3) OF THE ACT DATED 20.03.2015. THE AC TION OF THE AO WAS ALSO UPHELD BY THE LD. CIT(A) AND HENCE THIS AP PEAL. 4. THE LD. A.R. DREW THE ATTENTION OF THE BENCH TO THE LETTER DATED 22.09.2019 WHEREIN THE ASSESSEE HAS FILED ADD ITIONAL EVIDENCES WITH RESPECT TO THE CLAIM UNDER SECTION 3 5(2AB) OF THE ACT. THE SAID ADDITIONAL EVIDENCES COMPRISED OF IN TER ALIA CERTIFICATE OF REGISTRATION ISSUED BY DSIR DATED 09 .03.2011, DSIR RECOGNITION (RENEWAL) OF IN HOUSE R&D AND CERT IFICATE OF REGISTRATION, FORM 3CK, AUDIT CERTIFICATE AND ASSES SEES E-MAIL. IT WAS SUBMITTED BEFORE THE BENCH THAT THESE ADDITIONA L EVIDENCES WERE NOT AVAILABLE AT THE TIME OF ASSESSMENT AND AC CORDINGLY ITA NO.5085/M/2017 M/S. CHEMBOND CHEMICALS LTD. 3 COULD NOT BE SUBMITTED. THE ASSESSEE HAD IN ITS PO SSESSION SOME EVIDENCES IN PART WHICH COULD NOT BE SUBMITTED DUE TO PAUCITY OF TIME. THE LD. A.R. SUBMITTED THAT THESE EVIDENCES GO TO THE ROOT OF THE MATTER AND HAVE SUBSTANTIAL BEAR ING IN DECIDING THE ISSUE INVOLVED AND THEREFORE PRAYED BE FORE THE BENCH THAT SAME MAY KINDLY BE ADMITTED AND THE APPE AL OF THE ASSESSEE MAY KINDLY BE ADJUDICATED IN THE LIGHT OF THESE EVIDENCES. 5. THE LD. D.R., ON THE OTHER HAND, STRONGLY OPPOSE D THE ADMISSION OF ADDITIONAL EVIDENCES FILED BY THE ASSE SSEE BY SUBMITTING THAT THE ASSESSEE HAD NOT FILED THESE AD DITIONAL EVIDENCES AT THE TIME OF HEARING DESPITE THE ASSESS EE BEING ALLOWED ADEQUATE OPPORTUNITY AND THEREFORE THE SAM E SHOULD NOT BE ENTERTAINED. 6. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD, WE OBSERVE THAT THE BASIC DOCUMENTS ISSUED BY DSIR SUCH AS CERTIFICATE OF REGISTRATION, DSIR RECOGNITI ON (RENEWAL) OF IN HOUSE R&D AND CERTIFICATE OF REGISTRATION, FORM 3CK, FORM 3CM, 3CL BY DSIR ETC. WHICH HAVE A STRONG BEARING O N THE ISSUE AT HAND COULD NOT BE FILED BEFORE THE AUTHORITIES B ELOW AT THE TIME OF ASSESSMENT PROCEEDINGS OR IN THE APPELLATE PROCEEDINGS. WE, THEREFORE IN THE INTEREST OF JUSTICE AND FAIRPL AY, ARE INCLINED TO ADMIT THE SAME. THE ISSUE IS SET ASIDE TO THE F ILE OF THE AO TO DECIDE THE SAME DENOVO AS PER THE FACTS AND LAW AND AFTER CONSIDERING THE ADDITIONAL EVIDENCES AND AFFORDING A REASONABLE OPPORTUNITY. ITA NO.5085/M/2017 M/S. CHEMBOND CHEMICALS LTD. 4 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 17.12.2019. SD/- SD/- (A.D. JAIN) (RAJESH KUMAR) VICE PRESIDENT ACCOUNTANT MEMBER MUMBAI, DATED: 17.12.2019. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY /ASSTT. REGISTRAR, ITAT, MUMBAI.